Online investors: Take time, choose wisely
Having an online investing account makes it easy and quick to click, click, click…and you’re buying the stocks, bonds and funds with the juiciest returns – just like choosing the best, ripest fruits. Simple investing with no waiting, no problems?
Whether you’re a novice or expert, it’s easy to think investing online is a snap and surely quicker and more efficient. But since most online brokerage firms do not offer much in-depth financial advice for online investors, here’s a few things you should know before you open an online account and trade yourself:
- Ask the questions. Have your brokerage firm substantiate those advertised claims about the ease and speed of an online trade. How easy is it really for a first-time trader anyway?
- Timing is everything. Online investors are not typically linked directly to the market, so understand that a click to “buy” or “sell” on your part does not execute your trade immediately. Know whether you are seeing delayed or real-time stock quotes. How much is the lag time? When does your account info update?
- Website freezes? Get information from the brokerage firm about how you should proceed when outages, delays and other interruptions to trading and account access occur (yes, websites go down). Do you know what to do if your trade doesn’t go through?
- Can you prove you did it? Before trading, understand how to enter – and cancel – an order, especially if you have a margin account (not recommended). Do you immediately get a confirmation for a trade made?
- Beware of the fine print. Understand the fees, commissions and conditions you must meet to get those advertised low commissions (for which you may not qualify, but were enticed to open an account).
- Privacy protection? Review the firm’s privacy and security policies. Will your name be sold for mailing lists or used for promotional purposes by that firm or others?
- Hello…is anybody there? Know how you contact a live customer service rep to request prompt attention and fair consideration or resolve an issue.
- Who you gonna call? Every state has a State Securities Administrator. This government agency is there to protect investors. Call BEFORE you invest to:
- verify the brokerage firm is licensed/registered,
- see history of disciplinary actions against a broker,
- find out if an investment is permitted to be sold to you,
- protect yourself from scammers and investment fraud, or
- file a complaint if you feel there was wrongdoing.
Find contact info for your State Securities Administrator at the North American State Securities Administration site, NASAA.org.
The Money Godmother 
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